Mainstream Visions

Mainstream Visions

Location: New York
Author: Ken Silverstein
Date: Monday, November 2, 2009

The green revolution goes beyond financing research and development. It is also helping to create a robust national market for existing technologies and shovel-ready projects.

Federal stewardship in conjunction with some creative state and local programs are serving to inspire all kinds of renewable energy deals. As the initiatives go forward, private investors, who must ultimately sustain them, will join in increasing numbers.

Solar energy is now the focal point, which the U.S. Department of Energy says that can be applied around the country and through local communities. To that end, the federal agency is establishing programs with some cities to overcome barriers to development and to help create more solar projects. To get there, the department is allocating nearly $100 million to assist localities craft permitting processes, financing programs and training procedures.

"Our vision is that solar can be mainstream for every city," says Hannah Muller with the Department of Energy's Solar Energy Technologies Program. "The focus is now on 25 cities and to help them figure out the best way to integrate solar. Once we get it ready, it will be ready to roll out nationally. Cities want to green jobs and want them to drive economic development."

DOE's Solar America Cities Special Projects, for example, is working with Boulder County, Colo. to make solar more affordable by allowing homeowners and businesses to pay for development through a long-term assessment on their property. Muller says that the interest payments are reasonable and that the obligations transfer if the property is sold.

Similarly, Tucson, Ariz. has created an innovative financing program using clean energy renewable bonds. Investors who buy such bonds receive a tax credit from the local government, all to enable the building of solar facilities on city buildings. Portland, Ore., meanwhile, is working with the federal program to streamline its permitting and siting procedures while the Madison, Wis. is trying is trying to educate its citizens.

Perhaps the most daunting task, says Muller, is interconnecting solar capacity to the grid and particularly in high-density areas. In New York City, for instance, Con Edison had shunned solar. Now, though, it has learned new and effective ways to connect solar to local grids without jeopardizing reliability, she says.

"The money is going directly to the cities," says Muller. "They can dole it out to stakeholders if they see fit. This is about market transformation."

It's also about jobs. Research firm Clean Edge says that the top places in the country are the San Francisco Bay area, Greater Boston, Denver and northern Colorado as well as Austin and Detroit-Ann Arbor. The beauty of green energy development, the group says, is that it is benefiting a wide swath of American communities -- from the high-tech capitals to the hard-hit regions that now make wind mills and solar panels.

New Stage

Certainly, the long-term prognosis for both the economy and green markets in particular is positive. Overall, the national trend is one of supporting the policies necessary to clean the environment and to take steps to battle climate change. As a result, federal and state policies are integral to the effort with the former offering production tax credits and the latter -- in the case of about 26 jurisdictions -- mandating renewable portfolio standards.

To reach the stated goals will require a two-pronged approach. The first -- and the one most often overlooked -- is to engage the local communities, teaching them how to set ordinances and to create financial and technical incentives. The second -- and perhaps the most challenging in today's economic climate -- is to attract investment.

"Green industries such as solar have a unique potential to create jobs and wealth," says Frank Van Mierlo, president of 1366 Technologies. "Governments can spur solar market development by streamlining permits, opening up transmission, and providing incentives such as rebates. If smart, responsive policies are put in place then private investment will inevitably flow."

The Obama administration has determined that its dual role is to facilitate the next generation of clean energy technologies while at the same time lift the economy out of a deep recession. To the chagrin of some leading political and economic figures, it has plowed billions into research and development as well as shovel-ready projects. And under bills now pending in the House and Senate, federal lawmakers want to see renewable energy comprise 20 percent of the electricity mix by 2020.

The idea is that the federal government would work in tandem with those programs already set up by the states. Oregon, for example, provides a tax credit equal to 35 percent of an eligible project's capital cost, up to a maximum of $10 million. If a deal is properly structured, it can provide an attractive long-term return, the state says.

The New Jersey Board of Public Utilities, furthermore, announced that the state now has over 100 megawatts of solar capacity with more than 4,340 projects statewide. The growth has been financed in part by the buying and selling of certificates that provide solar system owners a revenue source that can help them offset the cost of installation.

The state is "continually looking to efficiently increase our renewable energy generation while reducing greenhouse gas emissions," says Jeanne Fox, president of the state's utility commission. She says that the financing model it uses "combined with federal tax credits and New Jersey's Renewable Energy Portfolio requirements provide the incentives needed to continue to spur New Jersey's solar growth."

It's about integrating solar power and other renewable energy into fabric of the American market system. Creative programs such as the Solar America Cities Special Projects and those sponsored by certain states are setting up a new stage and one where green technologies will help accelerate economic expansion.